WorldRemit Seeking Fresh Funding Ahead of London IPO Plan
(Bloomberg) -- WorldRemit Ltd., a U.K. company that specializes in money transfers into Africa, plans a new funding round in the next six months ahead of a potential initial public offering or buyout.
The fast-growing financial technology firm is seeking more cash as it continues to expand, Andrew Stewart, managing director of operations in the Middle East and Africa, said in an interview in Johannesburg on Wednesday. Founded in 2010 by a former London student who had struggled to send money home to Somalia, WorldRemit’s investors include Accel Partners LP and Technology Crossover Ventures, early backers of Facebook Inc.
“We have moved from a start-up company into a strong growth phase and have an aspiration for an IPO that’s about two years out,” Stewart said.
The executive was speaking after WorldRemit secured a South African license that will let customers transfer money out of Africa’s most industrialized economy to other countries on the continent. That gives users the ability to send cash from within Africa -- as opposed to from the U.K. and the U.S.
The company has also secured partnerships with Johannesburg-based wireless carriers MTN Group Ltd. and Vodacom Group Ltd. to access their pan-Africa mobile-money services, Stewart said, adding to similar deals with Kenya’s Safaricom Plc and Huawei Technologies Co. of China. Mobile payments are a popular way of making transactions in large swathes of Africa, where credit-card machines and banks with working ATMs are relatively scarce.
“Africa is our largest market, and without a lot of bricks and mortar infrastructure we are able to offer money transfer services at much better rates” than lenders, Stewart said.
WorldRemit was valued at about $800 million after its fourth and most recent funding round in December 2017, according to Stewart, who said that figure could rise to more than $1 billion. The total raised by the company to date is $225 million, with LeapFrog Investments LP joining Accel and TCV as investors. A fifth cash-raising would help the company push for more sending licenses in countries such as Kenya and Tanzania, as well as partnerships in the Middle East.
Founder Ismail Ahmed, who started WorldRemit with about $200,000, moved to the role of executive chairman last year to make way for a more experienced chief executive officer in Breon Corcoran, the former head of British betting firm Paddy Power Betfair Plc.
According to the World Bank, people in South Africa transfer $2.5 billion out of the country every year, of which half goes elsewhere on the continent.
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